A decline in apartment completions helped keep rental vacancy rates low over the latter part of 2019. But strong multifamily starts over the past couple of years suggest completions will pick-up in 2020. That will lead to a modest rise in vacancy, and effective apartment rental growth will therefore slow from 3.7% today to around 3.5% by the end of the year. That said, a lack of inventory in the home buying market will prevent a sharp slowdown in rental demand. In December the months’ supply of existing homes for sale hit its lowest since records began in 1982. That helps explain why December pending home sales saw their largest month-on-month drop since early 2010.
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